Free Hotspots Have A Better Return Than Paid

from the the-data-starts-flowing dept

Here’s a good lesson for everyone saying that it makes no business sense to offer anything for “free”. While all the various fee-based WiFi hotspots don’t like to talk about their numbers, folks offering free WiFi say the the returns are already very noticeable. Schlotzsky’s Delis, which was one of the first major chains to embrace the idea of free WiFi, has found that it brings in plenty more customers. From what they’ve seen, it’s paying back $100,000 per year, per store on an investment of $8,000. Not bad. And, they’re using expensive T1 lines. In places where you can get away with a cheaper DSL line, the payoff could be even greater. Schlotzsky’s recognizes the promotional value of free WiFi, and is even boosting their signal to offer the WiFi as far away as possible (and putting up a splash screen when you log on showing Schlotzsky’s menu). Meanwhile, a hotel that did a study of free vs. paid WiFi, determined that setting up a paid WiFi service would end up bringing in a whopping $8/day – not exactly an earth shattering amount. The paid WiFi guys claim that they offer better service, which may be true, but the free services are going to get the “good enough” crowd. If more places realize the promotional power of free WiFi (and those places keep boosting their signal), the only places that paid WiFi will remain viable will be in a place where free WiFi can’t reach them at all (which limits you to very few places, such as airports). As an aside, the issues surrounding free WiFi is what I’ll be talking about in a few weeks on a panel at Pulver’s Wireless Summit.

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Comments on “Free Hotspots Have A Better Return Than Paid”

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budrickvonallen says:

Free wireless access (it works for me, and I spend

Solatto’s Coffee Shop in the Eastlake Shopping Center in Chula Vista, California, recently started offering free wireless access (as long as you buy at least a cup of coffee). I find myself stopping by at least once a day, whereas it was previously once a week. I calculate I am now happily spending $100 per month there – as the result of this service. Not a bad way to catch up on email and on-line research – while having a sandwich.

Beck says:

Very Interesting

Interesting. I wish they would have addressed the issue of table turnover though. Does the free service cause people to stay longer and prevent new customers from being seated? That would be my only concern (and probably the concern of servers who would make less tips because their tables turn over less frequently). I like the fact that the deli provides computers for people who don’t bring their own.

This is great as it sounds like it results in filling a hotel room or restaurant table that would otherwise go empty.

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